Kennett's reign casts shadow on Baillieu

The previous sale of public assets has left the current Liberal Premier hogtied.

03 October 2012Josh Gordon

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Kennett criticises 'squealing' MelburniansFormer Victorian premier Jeff Kennett says to 3AW's Neil Mitchell that there was unnecessary 'squealing' over yesterday's traffic problems, resulting in a heated exchange.

THE timing was exquisite: 20 years to the day since Jeff Kennett's election win and the computer system managing his proudest transport project - CityLink - mysteriously died. Something akin to an urban cardiac arrest ensued.

The state government was at a loss, limply arguing that the traffic mayhem across Melbourne proved the case for the its ''number one'' infrastructure priority: a big express road connecting the Eastern Freeway and the Western Ring Road.

It didn't help that a day earlier Kennett had delivered a speech calling for ''generational change'' in the form of an underground rail network to ease Melbourne transport woes. Time for bold reform, Kennett told the Australian Property Institute's Pan Pacific Congress.

''We can hardly accommodate the traffic on the surface of our community in an efficient way and it is only going to get worse,'' he said. ''I'm actually thinking about a generational change of how we move around the city and that can in my opinion only be done through an underground rail system.''

Leaving aside the idea that Kennett did little to boost public transport when he was premier, his comments weren't exactly helpful for Baillieu, who has spent the past two years struggling to create a sense of momentum and direction.

For a start, the government's proposal for a nine-kilometre Melbourne metro rail tunnel from South Kensington to South Yarra seemed, well, pedestrian, in comparison to Kennett's vision. His call for generational change - realistic or not - would also appear to undermine the case for the Baillieu government's priority east-west road link, which will cost more than $10 billion if it goes ahead.

But more broadly, the anniversary of Kennett's election win has highlighted some uncomfortable truths for the Baillieu government, partly because it has provided an opportunity to reflect and compare.

Liberals who had front-row seats during the Kennett government nostalgically recall an era of bold reform, action and vision. There were difficult decisions, but there was also a clearly articulated plan for the state. Not only this, they say, but it was actually delivered. And for all the controversy, division and anger Kennett caused, it was rarely unclear what he stood for.

Liberal deputy leader and Tourism Minister Louise Asher got to know the former premier after joining the Burwood Young Liberals in 1976, when Kennett was a candidate for preselection (he won the seat soon after). Asher says Kennett had the same vision then as he had when he was premier, and he wanted more for Victoria than ''your stock-standard politician''.

''I regret that politicians these days, Labor, Liberal the whole lot, are either scripted or cautious,'' Asher told The Age. ''He was the last of the 'I'm going to tell you what I really think'-type politician and it worked. He was very clear on where he wanted to take the state.''

Lord mayor Robert Doyle says ''every Liberal government that follows Jeffrey will suffer by comparison, because it was a very vigorous, vibrant government''. Kennett, Doyle says, was never afraid of unpopularity.

''He had clearly in mind where he wanted to finish up in 10 years and 20 years, and to me that is a very attractive trait.''

These comments could be interpreted as implicit criticisms of Baillieu. I suspect they are more observations about Kennett, although it is impossible not to question what this says about Baillieu's leadership by logical extension.

The Kennett comparison highlights stylistic issues for Baillieu. First, Baillieu and Treasurer Kim Wells have made much of the challenging financial circumstances facing the state, highlighting a series of major project cost blowouts inherited from the Labor government and cuts to GST and other revenues. They are also demanding billions of dollars from Canberra to fund their infrastructure agenda.

Yet, as some Liberals have pointed out during the past week, Victoria's financial position today is benign compared with the early 1990s. When the Kennett government came to power in October 1992, the budget was in deficit by $2.2 billion and net public-sector debt had blown out to $33 billion.

In comparison, the Baillieu government inherited a triple-A credit rating and a solid budget surplus, although there were structural problems linked to the budget and a series of financial hits. The obvious question is, if Kennett was able to repair Victoria's finances in the early 1990s and spend billions building things, why not now?

Part of the explanation is that Kennett was prepared to take extremely tough decisions, while Baillieu has only been prepared to make moderately tough decisions, including slashing $300 million from TAFE funding and cutting 4200 public service positions.

But a bigger problem for Baillieu financially is that Kennett sold more public assets in dollar terms than the Thatcher government, including electricity and gas utilities, Melbourne's public transport system, and several prisons.

There isn't much left for Baillieu to sell. Hence his ability to fund big projects has been limited. There are also questions as to whether Victoria would once again accept some of the excesses of the Kennett years. Baillieu is in a tough position.